Retirement Plans: Check Net Return Before Investing

"Invest ₹1 lakh yearly, get ₹2 lakh annually." Doesn't this also sound like a great investment?

- Deepesh Raghaw

You pay ₹1 lakh every year for 15 years, and then receive ₹2 lakh annually for the next 15 years, effectively doubling your investment.

If you are a salaried employee in your early to mid-forties, this may strike a chord. One of your biggest worries perhaps is managing expenses after retirement. Retirement-focused products that promise certainty can therefore look attractive.

Appeal of guaranteed returns

These products are simple, transparent and easy to understand. The returns are guaranteed, and locking into a fixed rate feels reassuring at a time when deposit rates are declining. They also come with a small life cover.

Their biggest appeal lies in clarity: you know in advance how much you will pay, how long you will pay, the deferment period, what you will receive once payouts begin, and for how long.